Why bigger isn’t always best

It’s worth sharing  stories I hear about  dissatisfied clients of accountants as there are always lessons that can learned.  Let me be clear this story refers to a friend of mine who has recently gone back to his old accountant.

Why did ‘Harold’ change accountants last year?  He told me:

Believe it or not it really was just a belief that we needed to have an accountant that lived nearby. Our old accountant was good and I guess we also thought the grass might be greener at a big firm because they say all these impressive sounding things like they were going to assign two partners to our account and have quarterly updates which never happened.

So what did happen?

Harold wrote to the big firm as follows:

I am writing to let you know that we wish to return to our old accountants.  We have not been satisfied with the service received by [Your Big Firm].  I appreciate you have always been responsive when we have had queries and you were helpful during our meeting last year.  However, we (and I in particular) need more support and hand-holding than I have received from you.  I’m sure you would like to have some specific examples:

  • We thought we were going to have quarterly meetings to discuss the direction of the businesses
  • We have never had a courtesy call or email from you in over a year, asking how things are or on specific matters
  • The receptionist didn’t know who we were and couldn’t find our contact details when I phoned
  • We missed the tax return date for one of my companies  and we now owe a penalty (our old accountants used to remind us and keep on top of everything)
  • When I called to discuss the VAT registration, you sent me an email even though I wanted to chat through it with someone

I know some of those things may seem trivial to you but they are important to us.  We would feel more comfortable going back to our previous accountants who dealt with us for over five years.  It’s a small firm and we get a more personal service from them.

I am sorry to have to send you this news in the first week of the new year.  I have asked our old accountant to get in touch with you to request the files back.

The reply Harold received was short and sweet:

Your points are noted and I will pass the information to your accountant when I hear from him.

Best wishes for the future.

Lessons?  Was Harold’s experience typical of a larger firm? Were his expectations unrealistic? Had he been spoiled by his old accountant or was it that old level of service that created unrealistic expectations. I know what I think. What about you?

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Do you just give clients Answers or do you give them Advice?

When you see a Consultant in Harley Street (or the equivalent in Hospitals up and down the country) they will often give you options.  For example: You could try this new drug or you could have this operation.  How do you decide?

My wife’s approach is to turn the conversation around and to ask the Consultant what would they do if they were the patient or if their child/mother was the patient?  In other words she asks for Advice.

The letters that  accountants write to clients often contain a lot of technical information (often far too much in fact).  And if the client has asked questions the letter will contain information intended to answer the questions.  It’s very common for such answers to be in the style of ‘on the one hand, this, and on the other hand, that.’

I used to encourage my staff to check that their letters contained Advice when this was appropriate.  I used to stress that clients don’t just want Answers, they want Advice. So if there were two (or more) possible options, I suggested that our letters should always advice which route to go, which option to take.  This was of course subject to knowing that certain clients would prefer us not to do that. In my experience however most clients wanted Advice and generally did as we advised.

Is being an accountant that different from being a Consultant on Harley Street (when it comes to giving advice on technical matters)?

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Use it or lose it – Your clients’ trust

Accountants are expected and trusted to be good business advisers. This puts them in a good position to advice clients during the current troubled financial times.

I addressed this point recently in a post entitled: Accountants need to show they really are business advisers as we move into recession.

I have now seen reports of another survey that only serves to emphasise this point.

It was carried out by the Forum of Private Business (FPB)  together with commercial credit agency Graydon UK, and questioned 400 small businesses on their individual experiences of seeking financial advice.

The results reveal that 70 per cent of those questioned choose to consult their accountants for this type of advice, compared to only 47 per cent who look to their bank managers as trusted advisers.

The FPB comments on the results stress the declining confidence in banks as sources of financial advice.  My take on this is that the 70% figure above is LOWER than I would have expected. It might be a reflection of the respondents – perhaps only 70% had an accountant.

I make no apologies for restating a point I have been making for some months now.

Your clients trust you as a source of business and financial advice.  Now is the time to prove that such confidence is not misplaced. If you do not help clients through the recession you will lose them – either because they will cease to be in business or because they will move to a pro-active commercial accountant who can help them more than you have tried to do.

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How far do you go?

This was another of the thoughts I had during the workshop that followed an E-business for accountants seminar that I attended. (I’ve already commented on the seminar here and here).

One of the workshop leaders was suggesting that accountants should be more prepared to ‘upskill’ their clients as regards their e-business strategy. I asked whether he meant:

  • To be better able to talk to clients knowledgeably about e-business related subjects and to be able to introduce specialists to help the client with their issues; or
  • To be able to provide billable advice as regards e-business related issues (as distinct from the conventional services that accountants provide).

The point being that accountants want to be provide value to their clients and to be paid for the provision of valuable advice. Some might alternatively say they want to be paid for the time they spend providing valuable advice.

I’m not sure that the speaker had considered the distinction before I explained it. The seminar had been promoted as “a chance to acquire new skills that enable you to advise your clients on their e-business strategy.”

In replying to my question however the speaker made clear that he was referring to the first of those options. That made sense to me – although it was a big step down from the alleged objective for the seminar.

The speaker’s worthy aim was refined as encouraging accountants to assist their clients with e-business related issues and introduce relevant reputable specialists. This makes more sense to me than trying to ensure that accountants are able to provide valuable advice on such matters themselves.

I tend to think that a little knowledge can be a dangerous thing. This is just as relevant in the fast evolving world of e-business as it is in the world of tax which I know so well. (And I recently explained the reasons why I gave up giving tax advice).

I’ve learned a fair amount about many aspects of e-business over the last couple of years – from web marketing to search engine optimisation to the differences between effective website design and website development. And so much more. I’ve put much of this knowledge to good effect in my Tax Advice Network but I know my limitations and take advice from experts – not amateurs.

Still, accountants are often revered for their all round business knowledge. Revered and respected. That puts them in a powerful position and it’s one of the reasons why plenty of those e-business experts want to work with accountants. They believe that you are well placed to make trusted introductions to your clients.

On the tax front it was for similar reasons that I chose accountants as the main target audience for my Tax Advice Network. I know that good accountants know what they don’t know. They are aware of the dangers of going beyond their levels of competence when advising clients on unusual or complex tax issues. And they want to involve trusted, vetted, recommended, commercial and often local tax experts. That’s what we’re all about of course.

Going back to that distinction I drew at the start of this posting. How far do you go?

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How to develop good listening skills

These are so important as ambitious professionals need to be good listeners. We have to listen to our clients, our colleagues, our staff, our partners, our suppliers, our prospects and our prospective clients.

So here are a number of tips that, if practiced, will ensure that you are seen to be a good listener:

  • Stop talking – you cannot listen if you are talking.
  • Put the client at ease – help the speaker to feel they are free to talk.
  • Show the client you want to listen – sound interested.
  • Remove distractions – don’t doodle, tap or shuffle papers. Can you reduce the surrounding noise?
  • Empathise with the client – try to put yourself in the client’s place so that you can see their point of view. First try to understand then try to be understood.
  • Be patient – allow plenty of time. Do not interrupt.
  • Control emotions and temper – an angry person gets the wrong meaning from words. Avoid jumping to the wrong conclusions.
  • Go easy on argument and criticism – this puts the client on the defensive. They may ‘clam up’ or get angry. Do not argue: even if you win, you lose. “A man convinced against his will, is of the same opinion still.”
  • Ask questions – this encourages the client and shows you are listening. It helps to develop points further.
    Concentrate on what the client is saying – follow the main ideas; sometimes we hear only the examples, stories and statistics. Don’t allow your reactions to distract you from the key concepts.

Nature gave us two ears but only one tongue, which is a gentle hint that we should listen more than we talk. To become better listeners, we must be interested in what others have to say and less preoccupied with ourselves.

Can you think of any more tips to add as comments on this post?

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What do you count as a bad client?

I regularly encourage accountants to ditch their bad clients. There are two primary reasons for this.

– Following the Pareto (80/20) principle, you can be sure that your worst clients (however small the number) cause the bulk of the problems and hassle that you suffer. Conversely, 80% of your profits are probably generated by the top 20% of your clients.  I first commented on this concept last October.

– The complaints from and problems caused by your worst clients are more likely, than your best clients,  to end up as professional negligence claims or reports to your professional body for unprofessional conduct.

What counts as a bad client?

Let’s see if we can create a definitive list.  I’ll start with the examples I share during my talks for accountants.  Readers are encouraged to add their own  suggestions as comments.

On my list would go clients who display 2 or more of the following tendencies:

Before they become clients

  • Evidently expect free advice on the phone;
  • Reluctantly attend a meeting and seek further free advice;
  • Challenge elements of your standard terms and conditions;
  • Resist producing suitable identity verification evidence;
  • Delay signing your engagement letter whilst expecting you to start work;
  • Mentions that they have sued or reported one or more of your predecessors;
  • Resist making any form of up front payment (where this is part of your terms)

After being engaged:

  • Seeks further advice but is unwilling to accept that this will increase your fees;
  • Changes the scope of your work;
  • Resists any increase in your fee to reflect additional work they have requested [nb: I’m assuming that you would notify them of the increase before starting the extra work] ;
  • Appears not to value your time;
  • Insists on ‘gut feel’ advice rather than fully researched advice;
  • Uses buzz words and terms that they evidently don’t really understand;
  • Regularly needs to be chased up to provide information or other responses to your enquiries;
  • Delays production of key documents until the last minute;
  • Does not pay your fees in accordance with your payment terms.
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Why you should never simply say: You’re welcome

In my last post I stressed the need to clarify expectations and to avoid over-promising the speed with which you will undertake work for a client.

Let’s take that a stage further. Assume for a moment that you’ve really put yourself out for a client (or indeed for anyone). You’ve pulled out all the stops and the client is really grateful. They tell you how pleased they are and what a great job you’ve done.

What do you say in response?

If you’re like most people you probably say something like: “You’re welcome”, “It’s a pleasure”, “All part of the service”. And in so doing you immediately diminish the VALUE of what you’ve done because you are underplaying the effort involved.  Is that what you want to do?

Next time this happens think about using one of these phrases instead of a simple “you’re welcome”:

  • How kind of you. I really appreciate that because I did work hard on it.
  • That really makes me feel good  as it wasn’t an easy thing to do.
  • That’s great to hear as I did work hard to meet the deadline you set.

In addition to reinforcing the level of service you have provided, responses along these lines also compliment the client (or whoever has thanked you).  So it can really create or enhance a win-win scenario.

What else can you say in such situations?

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Why you should never fear asking for feedback

Last month I noted some thoughts about detailed fee quotes and bills for professional work.  The posting was inspired by the service I had received from my garage.  The same is true of today’s blog as the garage owner telephoned me yesterday.  Why?  Just a courtesy call, he said.  I know we did a lot of work on your car last month and I just wanted to check how everything is. 

How do you think that made me feel?  More to the point how would one of your clients feel if you called them just to see how everything is going some time after the completion of a big piece of work?

The worst that can happen is that they’ll say everything is fine. Yup.  That’s the worst that can happen.

What are the other possibilities?   There are only two variations I think:

  1. We’ve hit a snag, we’ve got a problem, we could do with some more help; or
  2. I’m not happy with what you did. 

The first of those is the one you probably want to hear. It means more paid work. You can provide further help to your client.

The ‘complaining’ type response is nothing like as bad as the ‘everything is fine’ reply.  No. I haven’t gone mad. I mean it.

Once you know there’s a problem you have an opportunity to sort it out, to provide further help and to generate some positive goodwill.  If you hadn’t made the call you would have been unaware of how the client felt. You might have mistakenly assumed  that the client was ‘satisfied’ because they hadn’t complained.  You would be unaware that they might well be bad-mouthing you to all and sundry.  Your call may have arrived just in time to avoid them formulating a complaint.

It’s upto you HOW to deal with the problem once you become aware of it.   Many advisers share storied of how they enhanced their reputation with a client because of the way they resolved a problem.    Please share your views by way of comments on this blog.

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Some trusted advisers shouldn’t be trusted

In a recent posting I highlighted some of the scenarios that suggest that an adviser has not achieved the level of trust that we tend to seek from our clients. I have also written about what it means to be a ‘Trusted adviser’ and that just because an adviser is trusted by clients doesn’t automatically mean that the trust is justified.

The adviser may not have sufficient knowledge to give reliable advice on the matter at hand. If he or she goes ahead however the client may still feel able to rely on it as they are unaware that the accountant is either naïve, lazy or out to deceive.

  • Perhaps they give advice in good faith but have insufficient knowledge or expertise to realise that the advice is wrong, incomplete or inappropriate;
  • Perhaps they hope the advice is ok even though they haven’t checked; or
  • Perhaps they are out to deceive in that they know they don’t know the answer but seek to convince the client that they do and that their waffle is good advice.

In all 3 scenarios the client may be unaware that the adviser should not be trusted.

The motivations are different in each case. Which is worst do you think and which is the most common?

Some years back I recall discussing two tax managers with a fellow partner in the accountancy firm where I worked. He was a general practitioner and evidently favoured one manager over the other. He told me why:

‘Rosie’ never seemed confident of the tax advice she gave him. She always wanted to double check it with someone else. He preferred ‘Cathy’ as she always provided him with definitive advice and never insisted on ‘wasting time’ getting confirmation.

I told him that I would prefer to rely on ‘Rosie’ any day. She knew what she didn’t know. She was neither naïve, lazy or out to deceive. ‘Cathy’ on the other hand evidently wanted to please the partner but I knew she did not have the experience or expertise to always have the right answers.

Some months later my partner thanked me for opening his eyes. He had been checking up on ‘Cathy’ and found that her advice was not always reliable. Several mistakes and problems had come to light. She had attempted to explain them away but on reflection he knew that they were a function of her over eager attempts to give advice and to appear to be more knowledgeable than was the case.

If this had only happened once or twice he might have thought her simply naïve. She had attempted to cover her tracks – in a further effort to deceive.

She left the firm shortly afterwards.

If your colleagues can’t trust you why should your clients?

* Names changed to protect the innocent (and the guilty!)

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How do you REALLY know if your clients are happy?

How many of us really know what our clients think about us? We might assume that clients like us although often when we say that we’re probably focussing more on our favourite clients and assuming that an absence of complaints evidences that clients like us and value the work we are doing. But is that enough? Indeed is it even a reasonable assumption?

In most professional firms success is based to one degree or another on the level of fees that you can generate. This is one of the reasons why a key part of my mentoring programme focuses on the skills required to be an effective ‘finder’ of work. But finding new clients is not the only way to generate more profits. It is also important to look after the relationship with existing clients – to be an effective ‘minder’. In the context of this article I would just highlight two of the four key elements of ‘minding’ clients:

  • Becoming a trusted adviser – understanding how to manage clients so as to encourage the right sort of referrals; and
  • Developing clients – identifying opportunities to encourage clients to instruct the firm re additional profitable services.

Here are some of the tell-tale signs you might be looking for.   What proportion of your clients:

  • Know that they benefit from regular tax saving advice from you?
  • Receive any form of newsletter or emails from you or your firm that evidences your desire to help them pay less tax or to otherwise simplify their tax affairs?
  • Pay their fees promptly and without complaint about the quality of the service?
  • Accept that the level of your fees is fair – or even great value given the advice and service you provide?
  • Ask you for timely advice on related matters (beyond the recurring compliance work)?
  • Willingly pay a fair fee for that additional advice?
  • Praise you in their emails and letters?
  • Genuinely thank you when you speak to them?
  • Say positive things about you, your service and your fees when talking to their friends and associates?
  • Regularly refer you to their friends and associates?

I created this list quickly for an article I have just written. Can you think of anything else that should be there? Please add a comment to this blog or email me your thoughts: Mark*BookMarkLee.co.uk [replace * with @ – it’s my attempt to prevent automated spam]

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